Commercial Law, 2012 Bar — Question 8

MULTIPLE CHOICE

BBB Banking Corporation issued a Letter of Credit in the amount of P5Million, for the purchase of fifive (5) tons of corn by X. Upon arrival of the goods, the goods were delivered to the warehouse of X. Thereafter he was asked to sign a Trust Receipt covering the goods. When the goods were sold, X did not deliver the proceeds to BBB Banking Corporation, arguing that he will need the fund for the subsequent importation. Is there sufficient basis to sue for criminal action? A) Yes, because X's failure to turn over the proceeds to the bank is a violation of the Trust Receipt Law. B) No, because the trust receipt was signed only after the delivery of the goods. When the trust receipt was signed, the ownership of the goods was already with X. C) Yes, because violation of Trust Receipt Law is mala prohibita, intention is irrelevant. D) No, because X has a valid reason not to deliver the proceeds to BBB Banking Corporation.

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